Exxon Mobil Corporation (NYSE: XOM) shares have outperformed the sector since July 2015, driven by the successful execution of large projects, the company’s defensive characteristics since the decline in oil prices and dividend growth.

Goldman Sachs’ Neil Mehta downgraded the rating on the company from Buy to Neutral, while lowering the price target from $98 to $93.

Better Prospects Elsewhere

“Since our upgrade to Buy in March 2015, we have viewed XOM as a defensive winner, with sharp downside to capital spending forecasts and near-term growth from international project start-ups,” Mehta mentioned.

However, the analyst now believes looking ahead into 2017/2018, Chevron Corporation (NYSE: CVX) is better positioned to generate production growth, cash flow and multiple re-ratings.

“We see few catalysts for XOM to drive relative outperformance vs. Energy, especially in a rangebound commodity price environment,” Mehta went on to say.

Stock Performance

The stock has appreciated 4 percent since July 2015, as compared to the 3 percent decline in the Energy Select Sector SPDR (ETF)(NYSE: XLE)and the unchanged S&P.

In fact, according to an article published by Reuters on October 28, Exxon Mobil shares slid following the company announcing its Q3 results, with a 38 percent decline in quarterly profits.

Despite rumors of Exxon Mobil looking at another large acquisition earlier in October, the Goldman Sachs report stated that at its analyst day and during conference calls, management has been hesitant to take on large scale M&A, which could have led to greater investor confidence regarding the company’s reserve replacement and growth.

Mehta sees greater upside in Chevron’s stock, “given higher levels of growth with the in-service of large Australia LNG projects; greater clarity on maximizing value in the Permian and US unconventional plays; and stronger free cash flow generation in 2017/2018.”

In support of this perception, a Huffington Post article said that Exxon Mobil shares could be on the verge of "irreversible decline," given the company's failure to cope with the low oil price and rising debt.

The EPS estimates for Exxon Mobile for 2016-2018 have been lowered to reflect the updates production, costs and refining margins.